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Brain Armstrong : Trump Administration may rapidly troublesome Cryptocurrency Wallet Rules

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INDIA

Dec, 04 2020

Dec, 04 2020

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The Coinbase CEO, Brain Armstrong blast the rumoured plans of the U.S. Treasury Department on Wednesday night. It was rumoured that the department is going to track owners of self – hosted cryptocurrency wallets with an oppressive set of data – collection requirements.


If the rumours are to be believed, the Secretary of the Treasury Department, Steven Mnuchin is preparing to tamp down on one of the fundamental beliefs of the cryptocurrency ethics.


According to Armstrong, the presented travel rule would need financial institutions like Coinbase to prover the ownership of the self – hosted wallet. Any withdrawal could be sent to the self – hosted wallet only after collecting identifying information.


If the rumour of new regulations regarding self – hosted wallets becomes true then the regulation would represent a criticism against the cryptocurrency industry of U.S.

The new regulation would compel corporations to know every transaction of their users, tracking movements, to keep logs and verification of identities even before a transaction could take place.


Last year, when an intergovernmental body, the Financial Action Task Force (FATF) asked its country’s members to apply the soi-distant travel rule to their crypto businesses, the worst-case scenario was envisioned by industry players.


The travel rule is considered as the long-standing rule which requires financial institutions to gather detailed information about the sender and receiver of the money transfer.


It would not only affect the users who store their coins on a hardware device like Trezor but will also influence several crypto services using non-custodial wallets like Software wallets, Decentralized Finance (DeFi) smart contracts and paper storage, all would be required to prove their provenience to transact.


In Switzerland and Netherlands, the virtual asset service providers (VASPs) are required to prove the ownership of non-custodial crypto wallets before the transaction takes place, as the extensive interpretation of FATF guidance has already been applied over there.


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